European supervision of capital markets: the AMF calls for an enhanced role for ESMA to promote a true Savings and Investments Union

The fragmentation of financial market supervision in Europe is a major obstacle to deepening the integration of European capital markets. Despite progress, supervisory mechanisms remain largely national, resulting in differences in their application, supervisory weaknesses, additional costs for economic actors and unequal investor and saver protection. This situation undermines the level playing field and limits the effectiveness of regulation and the scope for simplification. Consequently, it hinders the competitiveness of the European financial sector and the proper financing of the European economy.

In a context of profound market transformation and the growing importance of private finance and crypto-assets, it is essential that the EU has more integrated capital market supervision. This supervision must be capable of responding to the immediate challenge of simplifying the regulatory framework and putting an end to current implementation divergences. As with the single supervisory mechanism in the banking sector, the European Securities and Markets Authority (ESMA) should play a greater role in this new architecture, ensuring consistency in supervisory practices and exercising direct supervision over large, cross-border entities, such as pan-European market infrastructures, global crypto-asset service providers and large asset management groups. This would strengthen consistency in supervisory practices, improve control of systemic risks and provide more effective protection for investors and savers. The AMF recently published a position paper with the Austrian (FMA) and Italian (CONSOB) financial market authorities, calling for the urgent establishment of supervision of major crypto-asset service providers by ESMA, in line with the recommendations of the ESMA report published in spring 2024: “Building more effective and attractive capital markets in the EU”.

For the AMF, the principle of proportionality remains central to this approach. Smaller entities operating mainly on national markets and requiring specific support would continue to fall under the jurisdiction of the national authorities, under a delegation arrangement organised by ESMA on the basis of an indirect supervision model. This combined approach would make it possible to reconcile efficiency, proximity and coherence.

In order to adapt to this ambition, the AMF is formulating proposals on the governance of ESMA. This must obviously guarantee the representation of all national supervisors. It must also innovate by bringing them together with new and diverse skills. It could therefore be based on a board of supervisors responsible for regulatory consistency and a small executive committee responsible for operational supervisory decisions. The former would be comprised of the 27 chairs of the competent national authorities, while the latter would be made up of qualified independent individuals.

About the AMF
The AMF is an independent public authority responsible for ensuring that savings invested in financial products are protected and that investors are provided with adequate information. The AMF also supervises the orderly operations of markets.Visit our website https://www.amf-france.org/en